Randall Denley: A battle over bigger tax cuts is the election Ontario needs

When Ontario Liberals start campaigning on Premier Doug Ford’s promises, you know provincial politics have taken a strange turn. Stranger still, Liberal Leader Bonnie Crombie this week promised to cut taxes, not exactly the lane Liberals typically occupy.

That said, Crombie’s promise to cut income taxes for the middle class and take the provincial sales tax off home hydro and home heating bills was a politically savvy move. As an affordability measure, Crombie’s tax promises compare favourably to Ford’s recent, gimmicky plan to give every Ontario taxpayer $200. Even the Canadian Taxpayers Federation has applauded Crombie’s move.

The Liberals would cut tax on income between $51,446 and $75,000 by two percentage points, from the current 9.15 per cent to 7.15 per cent. They say that would save the average household $950 a year. Taking the provincial part of HST off of utility bills would deliver another $200 in household savings annually.

Which would you rather have: $200 a person once or household tax savings of up to $1,150 a year indefinitely? You don’t have to be good with numbers to answer that question. In fact, voters won’t even have to decide. By next year’s expected spring election, the $200 Ford cheques will be in hand. That will leave the PCs with nothing new to counter the Liberal tax cut.

From the Liberal perspective, the tax promise accomplishes two things. It reminds voters that Ford has not kept his 2018 promise of a middle-class tax cut. It also gives the Liberals a better affordability plan than Ford’s combination of eliminating licence plate fees, repeated “temporary” gas tax cuts, and giving out a one-time cheque.

Post-pandemic inflation has markedly increased the cost of living. This is not a one-time problem that requires one-time solutions. It needs permanent action.

Cutting the provincial sales tax on power and heating bills is also politically smart. Why are these essential costs subject to sales tax in the first place? Ford is a strong opponent of the carbon tax, but his government also taxes natural gas and oil used to heat homes. At least the federal Liberals give part of their carbon tax back.

Traditional Liberal thinking would have applauded higher energy bills as a way to discourage fossil fuel use, helping to save the planet. Any move away from that political dead end is good for the Liberals and for taxpayers.

Crombie’s Liberals have already promised to cut small-business taxes by 50 per cent. Less usefully, they have pledged to provide a tax credit of up to $1,000 for children’s sport and recreational activities. The tax system doesn’t need more boutique tax credits.

The Liberals might want to give a little more thought to how they’d pay for their $2.8-billion tax cut. Crombie suggested that the solution was putting an end to “shady backroom deals,” and that she’d conduct a Trump-like investigation of everything Ford has done that she doesn’t like. Somehow that would generate money.

It’s a weak approach, and unnecessary. Government revenue rises every year. This fiscal year, it is expected to be $212.6 billion. The year after, it is projected to be $8.2 billion higher and the year after that it will rise by an additional $10 billion. It’s perfectly reasonable for any government, even Ford’s , to leave some of that money in taxpayers’ pockets.

Ford’s response to the Crombie tax promise has been rather lame so far. The PCs have tried to paint Crombie as “the carbon tax queen” because she was a Liberal MP years ago. The PCs claim that she would introduce a provincial carbon tax. Crombie says she wouldn’t. Why would she? The federal Liberal carbon tax has become political poison and provincial Liberals know it.

Still, Ford said this week, “It’s a very clear choice to the people of Ontario, it’s tax you to death under Bonnie Crombie, or make sure you vote for the PCs and we’ll put money back in your pocket.” Nice soundbite but it won’t survive a voter reality check.

The PCs would do better to stress that their $200 payment would deliver $800 to a two-parent family with two children, but even then, it’s less money and one-time only.

For a party branded conservative, ceding the tax cut issue to a rival party can never be a good thing. Ford needs to respond to Crombie’s promised cuts in the spring pre-election budget. All it would take is keeping his six-year-old promise to cut income taxes.

Imagine a provincial election where a key issue is the size of the tax cut. That’s the kind of campaign beleaguered taxpayers would love to see.

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